Govt mulls USD10bn bailout package for BSNL and MTNL

The Indian government is considering an INR740 billion (USD10.7 billion) bailout for loss-making state-owned telcos Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), potentially funding a voluntary redundancy scheme (VRS), 4G spectrum and CAPEX. The Economic Times cites officials familiar with the proposal as saying that the plan features the allocation of 4G airwaves worth INR200 billion, plus INR130 billion to bankroll the rollout of LTE networks. The remainder would cover a planned reduction in the retirement age and VRS, with both measures intended to cut the operators’ substantial staff costs. Arguing in favour of the bailout, the Department of Telecommunications (DoT) noted that closing the two operators would cost around INR1.2 trillion, whilst a strategic disinvestment might struggle to find any interested buyers due to the ongoing financial stress on the sector.